T-Rex Scores reveal how much of your investment return you actually get to keep and how much you lose in fees.
What’s your Score?
Each of us can determine our own T-Rex Score using simple assumptions that best match our circumstances. But for purposes of making comparisons across different types of investments we use consistent time frames (25 years) and rates of return (6.4% for stocks and 4% for bonds*) to produce “Standard T-Rex Scores”.
Canadians own $1.3 Trillion in mutual funds. According to The Investment Funds Institute of Canada, Canadians have greater confidence in mutual funds (86%) than other financial products such as GICs, bonds and stocks. But do mutual fund investors understand how much of their investment gains they actually get to keep?
Canadian Mutual Fund Standard T-Rex Scores
| Selected Canadian Mutual Funds | Size (billions) | Type | Standard T-Rex Score |
|---|---|---|---|
| RBC Select Conservative Portfolio | $23.0 | Balanced | 49% |
| Investors Dividend C | $16.3 | Equity | 38% |
| Fidelity Monthly Income Fund | $13.2 | Balanced | 40% |
| TD Canadian Core Plus Bond | $12.9 | Bond | 51% |
| Manulife Monthly High Income B | $9.2 | Balanced | 43% |
| Scotia Canadian Dividend Fund A | $7.8 | Equity | 57% |
| Sentry Canadian Income Fund A | $5.7 | Equity | 46% |
| CI Signature Income & Growth A | $4.73 | Balanced | 41% |
| Mackenzie Ivy Foreign Equity A | $4.5 | Equity | 43% |
| BMO Dividend Fund A | $4.2 | Balanced | 41% |
| Trimark Fund A | $3.9 | Equity | 39% |
| Desjardins Enhanced Bond C | $3.7 | Bond | 44% |
| National Bank Bond Fund | $2.0 | Bond | 49% |
| Sun Life Granite Balanced A | $1.7 | Balanced | 44% |
Average T-Rex Score: 45%
Average Lost to Fees: 55%
Do you invest in these or similar funds?
Are you are keeping your fair share of returns?
You have a choice. If you aren’t satisfied with your T-Rex Score, you can do something about it. Would increasing your T-Rex Score and keeping more of your investment returns be worth spending the short amount of time necessary to learn investment basics? It’s easy when you know how.
Brian Lee
October 14, 2019 5:41 pmHi Larry,
Thanks for writing this helpful book. I’m certain it is making a difference & adding value to the world.
I’m in my early 60’s and was downsized from my corporate job. I depend mainly on my investments/savings to provide the income cash flow to support my family, though I will get additional income from CPP/OAS in a few years. So I must be very diligent and careful as a DYI investor.
What are your thoughts/recommendations regarding the Mawer’s Balanced funds which don’t pay any trailer fees and have relatively low MERs. They have excellent long/mid/short term performance. It seems they have very good performing funds right across the board on their product offerings. Based on Morningstar data, they appear to perform above their peers in the Category of Global Neutral Balanced. Comparing to the index, “Morningstar CAN Bal Glbl 60/40 CAD”, they also outperform, but during other time periods they are slightly below. I have significant amount invested in Mawer’s 3 versions of their Balanced Funds and some invested in Mawer International Equity in my RRSP,TFSA and taxable accounts.
My questions are:
1. Is Mawer too good to be true? They seem to defy the “fact” that the vast majority of mutual funds cannot outperform their index in the long term. I haven’t calculated their T-Rex score yet, but their balanced fund’s MER is about 0.92%. How sustainable are they in continuing to produce such stellar performance? Might Mawer’s funds one day will “reversing to their mean”?
2. I like Vanguard/John Bogle’s ETFs and you recommended their VBAL all-in-one ETF which I’m considering. Year to date, Mawer Balanced fund is outperforming their VBAL ETF slightly. Isn’t the VBAL ETF not been around long enough to say they will do well?
3. Would having one’s entire investment portfolio using a combination of low cost ETFs(Vanguard & perhaps Blackrock IShares) and low fee mutual funds like Mawer or even Philips Hagar North(PHN) be another good strategy?
Thank you for your time.
Andre Potvin
May 30, 2020 1:04 amWhat is a good T-Rex Score? 60%,70%, 80%?
Larry Bates
May 31, 2020 2:42 pmHi Andre. There is no one correct answer. If, for example, you T-Rex Score is 70%, you are losing 30% of your return to fees. If you feel that you are getting lots of value from your advisor that is worth that 30% cost, then good for you. If you feel you are not getting to keep your fair share, then your Score is not good and you should perhaps either get a better advisor or find a lower cost (and higher T-Rex Score) way of investing.
Hope that helps.
Peter
November 17, 2020 5:23 amHi Larry,
I have the same question as Larry asked in his above.
I also have a substantial amount invested with Mawer, particularly their balanced funds.
Their historical returns are really quite excellent and they do buck the trend as they consistently outperform the market
I ran the numbers on $100,000 invested over 10 years for XBAL and Mawer 104. I also included Mawer’s return since inception in 1988 for comparison. VBAL doesn’t have a posted 10 year annualized return as it is was released in 2018. Mawer’s returns are posted
net of fees.
Mawer 104: Return 9.4% (net of fees) T-REX 100%, Gain you keep: $145,569.
Mawer 104: Return 8.4% (net of fees, since inception), T-REX 100%, Gain you keep $124,023.
XBAL: Return of 5.4% (Fees 0.2%), T-REX 95%, Gain you keep $66,019.
From these results it appears to me that Mawer is a hard one to beat despite their MER of 0.91%. I am willing to pay them for those returns, though I realize that fund managers can change and ‘past returns are not a guarantee of future performance’.
I realize this sounds like a Mawer sales pitch, but I am just trying to rebalance my own portfolio, having recently fired my big bank advisor for 1.1% three year returns.
Would you suggest a balance between XBAL/VBAL and Mawer, or do you think it would be reasonable to go all in with Mawer?
Thank you for your time.
Larry Bates
November 20, 2020 6:56 pmHi Peter. I know Mawer is very good….excellent historical performance and lower than average fees. Will they be able to keep up the outperformance? I don’t know. Splitting between low cost ETFs and Mawer would be hedging your bets a bit which makes sense but it really is a personal choice. Either way, you will likely be well ahead of most Canadian investors.